Mt. Gox, the largest bitcoin exchange in the world, has been sued by North American bitcoin exchange CoinLab for alleged breach of contract. CNET reports that the two exchanges created a partnership in February that would enable CoinLab to manage North American operations for Mt. Gox. Details on the lawsuit appear on CoinLab’s website.
Now CoinLab says Mt. Gox hasn’t provided with the information and server access that had been promised under the partnership. The partnership was supposed to come with $500,000 in VC funds and the help of Silicon Valley Bank. Mt. Gox was hoping that it would improve confidence in bitcoins.
Bitcoin Exchange War: CoinLab Vs. Mt. Gox
CoinLab filed the suit against Mt. Gox Thursday in Washington State. The lawsuit alleges that Mt. Gox is guilty of several breaches of contract amounting to damages of over $75 million. It said in addition to the information Mt. Gox said it would supply and didn’t, the bitcoin exchange also continued to market its services in the North American market and has even accepted new customers from the region.
CoinLab’s CEO said he believes the suit will help make the original partnership happen by resolving the issues that have developed between the two bitcoin exchanges.
Falling Prices Of Bitcoins
Meanwhile the bitcoin market itself has yet to recover from the problems which began in April after some major denial of service attacks on Mt. Gox. As of this writing, Mt. Gox, which handles the lion’s share of the world’s bitcoin trades, reported the lowest price of bitcoins as $79 and the highest price as $114. The current price was listed around $94, the same value CoinLab had listed at the time.
The virtual currency was worth $225 less than a month ago. Mt. Gox attributes the sudden drop in value to “stronger than usual” cyber-attacks, which halted trading in April and caused the exchange’s site to lag. The exchange said the lagging caused investors to panic and start selling off their bitcoins.